CALGARY — Billions of dollars in lawsuits will likely result if Joe Biden is elected U.S. president this November and carries out a threat to cancel the presidential permit allowing operation of the Keystone XL pipeline, Canadian observers say.

The promised action by the leading U.S. Democratic Party candidate, confirmed by his campaign office on Monday, would also deprive U.S. Gulf Coast refineries of a fresh supply of vital Canadian heavy oil, leaving them dependent on imports from countries such as Saudi Arabia and Venezuela, they add.

“This is all grandstanding and it doesn’t look good on the politicians,” said Hal Kvisle, a former CEO of TC Energy and current chairman of both the Business Council of Alberta and oil and gas producer ARC Resources Ltd.

“TC would have a multibillion-dollar lawsuit against the U.S. government if they kill the project that’s already been approved.”

The company green-lighted Keystone XL on March 31 following the Alberta government’s pledge to take a $1.5 billion equity stake and provide a $6 billion loan guarantee to ensure work started immediately.

A month later, TC Energy said it would adjust its plans but forge ahead with construction after a U.S. court ruling that invalidated a nationwide permit allowing pipelines to cross waterways.

The company said Tuesday it had nothing to add to its Monday statement that ignored the comments from the Biden campaign, instead extolling the virtues of Keystone XL as an engine of investment and jobs growth.

The Biden declaration represents a significant risk for the US$8-billion project and would likely result in Calgary-based TC Energy re-examining how prudent it is to continue construction, said financial analyst Jennifer Rowland of Edward Jones.

Alberta’s backing, however, mitigates the financial concern.

“I think it becomes potentially a little bit easier for TC to go ahead and spend knowing that the initial money is really being backed by the government,” she said in an interview.

“That does take some pressure off so that they can continue. They can gamble because it’s not their money.”

Rowland said it would be “naive” to think that Biden wouldn’t kill the pipeline simply because it has been partly built.

There are three oil export pipelines currently under construction. The Trans Mountain pipeline expansion is to add 590,000 barrels per day though the Vancouver region, while 370,000 bpd is expected from the Line 3 replacement project through the United States.

But Keystone XL’s 830,000 bpd of capacity, if anything, is more important for Canada, said Dennis McConaghy, a former TransCanada executive and author of a book about the pipeline for which initial applications were made in 2008.

“KXL was always the most strategic of those three pipelines,” he said on Tuesday.

“It went to the market that most wants our heavy oil. It’s a much more direct route, it provides the greatest economy.”

The project’s potential value in higher oil prices and higher royalties for government make Alberta’s investment worthwhile, in spite of the risk, he said.

Richard Masson, an executive fellow with the School of Public Policy at the University of Calgary, said construction of the two other pipelines will satisfy the immediate need but Keystone XL will eventually be required if Alberta’s oilsands output continues to grow at around 100,000 barrels per day each year as forecast.

Spokeswoman Sonja Franklin of oilsands producer Cenovus Energy Inc. says the company won’t speculate on the outcome of the U.S. election and remains a firm supporter of the pipeline.